No Money Real Estate Investing - Part Two

By Dave Peniuk

People often ask me how they should obtain the money for their real estate investments and are sometimes not happy with my response. That's because many are hoping to find easy solutions that don't require much work on their part and are therefore disappointed with my advice.

So when people ask me:

- "Should I find other investors to partner with if I have no money of my own? This seems like a daunting task and I'm not sure how to go about it. But, I really want to get started investing in real estate as I've recently seen several nice investment properties."

- "Would you suggest I use owner financing, home equity line or credit cards for a down payment on a new investment property? And if so, what is the time line to see a positive return on investment to reimburse funds?"

- "How can I do deals like Robert Allen - no money down, cash back on closing?"

I usually start by telling people to begin by tracking their own expenses. Make sure you spend less than you make. And, make sure you are doing that each and every month. Then, use the excess to pay down your debt or save for your real estate investments.

The one piece of advice I give universally is that you should NOT use your credit card to finance your real estate investment - EVER. No matter what the end game is, there is far too much risk involved with that.

What if something goes wrong with your investment and you end up paying 18% interest on that $5,000, $10,000 or $20,000 you borrowed from your credit card for years to come? Do you want me to do the math on that?

Some people turn to the equity in their homes. This can be good or bad depending on your situation. For example, if you're about ready to retire or are over 65, then this could be a bad idea. On the other hand, if your home has about $200,000 worth of equity and you're younger than 50, it could be an excellent choice- as long as you think you can handle the extra payments if something were to go wrong with your investment.

A 'good deal' is defined by one where the rental income from the investment property can pay for the monthly expenses on the property as well as the monthly payment increase that a $50,000 home equity loan will cost you. If it does, then a loan on your home equity is a great way to get the money for a real estate investment property.

As for owner financing (aka vendor take back financing)- I love using owner financing. We've used it several times when we don't quite have enough for 25% down and the bank won't lend us any more than 75% on the property. Vendors are often happy to oblige with a loan for the difference. It's secured against the property, it gives them a nice guaranteed rate of return each month, and it's cash in their pocket each month. If your property will cover these extra payments and the vendor is willing to do it, then this is your best option. BUT - if you have no down payment at all and can only get 75% financing from a bank, you shouldn't use this method to finance the rest.

We've bought properties for no money down. We've learned the hard way that no money down does not mean it won't cost you!

Don't confuse using home equity or owner financing with no money down real estate investing. They are nowhere near the same thing.

What makes no money down so risky? Well, for starters, you would have to borrow 100% of the value of the property. That means if property values drop, even by as little as 5%, you'll owe more money than it's worth. And you probably won't be able to afford it, which will result in foreclosure. This sort of thing has been happening frequently in North America lately.

It is very hard to find a property that will make you money if you've purchased it using 100% financing. On top of the purchase price of the house, you'll also need to come up with 2-3% of the purchase price to pay for a lawyer, property inspector, taxes and things like that.

No money down deals are not only MUCH riskier because you have no equity in the property, they are also pretty hard to find because they rarely cashflow. If you have no money for a down payment on your real estate investment, then, in the following order, this is what I suggest:

1. Start acting like the master of your money. Get out of debt as soon as possible and start to save. You may not be able to save a significant amount at first, but a potential partner will look on you more favorably if you show that you are able to manage your own money.

2. Look to your home. If you own a home and have some years left before you were planning on retiring and have a reasonable amount of equity in your home (over 25%), consider using a portion of the equity in your home to get started with investing in another property.

3. If you rent or don't have any home equity, then you need to do some research to find a great property that could be purchased with as little as 10% down. In this case, a great property is defined as one where the rent will pay for the expenses of the property. Once you find it, you need to get a partner with money to invest and no time to do research of his own. This requires you to sell yourself as well as the property.

Over the years, we've bought many properties with very little of our own money. We've tried the no money down deals and never had one work out successfully. However, we have had success when working with partners when we did all of the work involved with finding, purchasing and overseeing the property. Since the partner provided the down payment, it allowed us to get a better house in a better location for which we could charge higher rent than if we had bought a lesser house in a lesser neighborhood. It also meant that we had equity in the property from the very beginning. The deal with the partner is outlined prior to purchase- even though the partner provides the down payment, we jointly own the property (we each own 50%). If repairs to the property are required, any costs that can't be covered by the rental income are paid for 50-50 by us and the partner.

Because we are 50-50 partners, we split the profits of the sale evenly. By profits, I mean whatever is left after the partner gets his down payment back. By having a partner, you're gaining opportunities you've never could have had on your own while reducing your risk. It's a great deal. - 23229

About the Author:

Learn How to Retire with rental property with Daves free rental property Investing Starter Tips Guide. Learn how to find money for rental property deals, create financial freedom, positive cash flow and massive wealth with tips like: How to find quality rental properties, finding and keeping great tenants, and easy ways to make more money with rental property.

Some Tips For Day Trading the Stock Market

By Jerry Barr

Day trading the stock exchange involves the fast purchasing and selling of stocks on a day-to-day basis. This method is used to secure quick profits from the consistent changes in stock values, minute to minute, second to second. It is rare a day trader will remain in a trade over the course of a night into the next day.

PC watching the markets twenty four seven in order to be a successful day trader?'

The answer's no. It's not critical to sit at a P. C. twenty four seven. There are a number of things to consider, but sometimes the rule of day trading is to trade when everyone else is trading.

As with all financial investments, day trading is risky in reality, it's one of the riskiest forms of trading out there. The stock prices rise or fall according to the behaviour of the market, which is completely unpredictable.

If you are constrained by a small amount of capital, you may not be in a position to buy large amounts of a stock, but purchasing only a small amount can add to the danger of a loss. And, glaringly, it is not possible to forecast with certainty which stocks will end up in profits and which in losses.

It's also important to know that in day trading, it's the number of shares instead of the value of shares that should be the focus. If you day trade, you may face losses, but even for the costlier stocks, the loss should be debatable, because prices do not usually fluctuate to an acute degree over the course of only 1 day.

The day trading industry deals in a big variety of stocks and shares. Here are only a few : Growth-Buying Shares shares made from profit, which continue to grow in value. Eventually, these shares will start to decline in price, and a professional seasoned trader can usually envision the future of this type of share.

Although these shares are generally inexpensive, they seem to be a very risky investment for day traders. You'd be safer to go with big caps and / or mid-caps, which are way more secure and stable thanks to a premium.

Unloved Stocks company stock that has not performed well during the past. Traders buy these shares in the hopes of generating profits if and when the stock rises in worth. As with tiny caps, unloved stocks can be a dodgy choice for day traders.

These examples are not your sole options when it comes to day trading stocks. The best way to figure out which type of stock is right for you is to invest some time for careful research, a knowledge understanding of market patterns, a solid strategy, and a controlled trading plan.

The key to successful day trading is to be prepared. Know as much as practicable about the industry before you start essentially trading. You need to be taught how to trade ONLY when the market gives the right signals. - 23229

About the Author:

Find more on best 10 stocks to buy and 10 stocks to buy.

Top Reasons Why Some Investors Opt To Trade Penny Stock

By Malcolm Torren

The stock market trading is an open field for those who want to join in the stock trading. Unfortunately, not all stocks are affordable. But there are basically three levels of stock investments to choose from. There is the large cap investment for multi-billion firms. Then there's the medium cap shares investment. And lastly the there's the small cap trading commonly known as penny stocks. Some inventors choose to trade penny stock.

Before anything else, the penny stock is also called by many names. Some stock market people would call it microcrap stocks, some would say small caps. Others would also refer to it as nano caps. The closest term used is penny shares. Occasionally it is also referred to as emerging growth. This trade penny stock article will use three variations - small caps, penny shares, and penny stock for the purpose of easy recall.

So why do some investors opt for penny stock trading than other stock investments? Here are some of the obvious reasons:

- It's affordable. The trade is usually pegged for a starting value not exceeding five dollars per share. In fact, the most frequent practice is priced at three dollars, one dollar, less than a dollar. The only hitch is that not many investors frequent this investment because it is less liquid. Also if these stocks are derived from pink sheets, it's normally lacks important information vital to your decision making.

- More prevalent press releases than large and small cap stocks. Yes, there are more press releases with penny stocks than the other two stock investments. Penny stock promoters do this to expose the information to the public thus attracting more investors. The downside is that, many of these press releases are abused by fraudsters and over hyping them. Fortunately, if your source is credible, media exposure increases the value of your trade penny stock thus an opportunity for profit.

- Penny stocks have higher ROI. Yes this is true. While the dangers of the small caps investments are often forewarned, there is still good money that can be made here. When you understand the trade enough to have that level of confidence, you will see the benefits. The right attitude should be to remember that every investment has risks.

- Some emerging companies or new products use penny stocks as a launching pad. Well some but not all. If new products are launched, there is no surety about its success yet. Your only way to determine its probable success is to check the manufacturer's background. In this trade penny stock business, you have to do your own research extensively. Many successful small cap investors spend about five hours per day working and digging information.

Try to opt for the small cap investment. Then when you learn the trade penny stock loops, you can always work you way up. Your success can be determined by how much you are willing to work for it. Just stay with accurate facts and be smart with your decisions. - 23229

About the Author:

Know how to trade penny stock wisely. Find basic tips on investing in penny stock.

A Short Forex Training on Risk Management

By Bart Icles

Any form of trading poses different kinds of risks. In the foreign exchange market, this stands quite true. There have already been lots of investors who have lost large sums of money in the hopes of generating profits in the forex market. Online brokers always try to sound optimistic but a smart trader understands that realistically, there is no easy way to make money in the currency market. A forex training on risk management can help you a lot in ensuring that you will not lose all your assets in just one trading go.

It helps to invest in your forex education before you start trading in the currency market and to continue doing so while you are already actively trading. A simple forex training or tutorial can already do so much in keeping you well informed on the different factors that can affect your trading position. A deficiency in market knowledge often marks the downfall of many investors and is one of the primary reasons why they lose large sums of their money. This also spells failure for new forex traders who do not take time to learn more about the different market forces that drive the currency rates.

Another important factor in managing risks in trading is having a forex broker. While you might learn from many forex tutorials that it is relatively easy to enter the forex market - all you need is a computer and an internet connection - it actually takes more than these two elements for you to start trading.

The tricky part comes in when you start looking for a forex dealer or forex broker to whom you will open an account with. It is important that you choose your forex broker well because forex brokers spell much of your trading success. This is also important in keeping you from taking unnecessary risks. To be safe, you must do some research about your forex broker and only deal with one who is regulated.

So what do these forex brokers or dealers really do? More than just helping you manage your account, they also do much in maintaining your risk profile. When participating in the forex trading market, investors must have risk profiles that are solid as rock. See to it that your forex broker has pre arranged agreements with you about your risk profile or the amount of invested capital you are willing to risk. - 23229

About the Author:

A good forex trading system course starts with a desire to learn and a drive to become a great trader. Learning with a free forex course takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.

Choosing the Right Forex Software

By Bart Icles

When a trader acquires the services of a (certified) FOREX broker, it also means that he'll get accompanying Forex software for trade transactions functions and retrieval of market data. Online trading, is a very lucrative venture to go into, that's why many individuals and companies are taking advantage for the demand for the services of experienced brokers who have accumulated a vast knowledge and more than adequate comprehension of what trading software's are mostly appropriate to use for a particular trader. These software programs are classified into two types: web based and client/desktop based. So choose well and wisely according to your type of trading.

If you are able to take hold of a good FOREX software program that is able to deliver a fast and accurate data transfer of relevant market quotes without fail, then your reaction time to market markers will become much easier to do. The world of currency trading is very unpredictable, and anything may happen within a moment's time. But if you have a reliable Forex software system at hand, then you'll be able to manage its risk at an acceptable level. The catch is how to choose the right one from the many competing companies currently proliferating in the market today.

Before committing to any Forex software program, you should consider a few factors to avoid delays and problems in your trading. Security should be the at the forefront of your concerns, so you should look for a software that has an 126 bit SSL encryption to prevent uninvited guest accessing your personal data, including your financial history. The ideal software program should offer the most basic yet most security options, a non-stop or 24/7 service for technical concerns and trouble shooting and maintenance support for any hitches, regular backups for data storage and recovery.

To avoid losses, you should only get a Forex software program that is using the most current and up to date systems to help reduce or lessen the risks involved with online currency trading. If you know the right questions to ask about the nature of Forex software systems, finding the right software program may become easier than anticipated.

Finally, ask the Forex broker if the software system provides some additional future updates that are free, and some other important Forex programs that give extra information that may help you navigate your way through the market as easily as possible.

Forex currency with all its complications can be easily understood with the appropriate software system. Find one and you'll be well on your way to becoming a successful Forex trader in no time - 23229

About the Author:

Finding a good forex brokerage starts with a desire to learn and a drive to become a great trader. But learning online forex trading business takes dedication and a good teacher. But once you learn how to trade and do so successfully your life will change and you have options and financial resources you never had before.